Car Crash Cameras help to avoid the ‘Crash for Cash’ Scam

With the rapid rise in the number of ‘Crash for Cash’ fraud claims, a growing number of motorists are pro-actively installing in-car video dash cameras in their vehicles to protect themselves against those involved.

The UK’s Insurance Fraud Bureau (IFB) is currently investigating about 40 ‘Crash for Cash’ gangs in Britain. One of their more dangerous scams involves the criminal’s car pulling out in front of an oncoming motorist and then suddenly braking very hard. Another typical scam is to flash clearance to let your vehicle out at a junction and then accelerate so that it causes a collision, afterwards denying the flashing of their headlights.

100 ‘Crash for Cash’ incidents happen every day in Britain

It is estimated that nearly 100 ‘crash for cash’ incidents take place every single day and in total they cost the insurance industry around £400 million, pushing up the premiums for honest, innocent drivers by around £46 each.

That includes you, but it could be much more money if you were actually involved in one of these incidents, causing you to lose all of your no claims bonus, and obviously taking several years to get it re-instated alongside your premium. For any younger drivers that could be financially disastrous.

Alec James, Halfords in-car technology manager, says: “Following an incident people are often reluctant to admit guilt and risk losing their no claims discount. In addition, the surge in fraudulent so-called ‘crash for cash’ claims is causing genuine concern among innocent drivers.

Around 550,000 whiplash claims a year are filed in the UK, of which over half are estimated to be bogus. According to the AA, since 2006 there has been a 60 per cent rise in personal injury claims whilst the number of reported accidents on UK roads has fallen by 20 per cent over the same period.

As reported in Insurance Times, ‘Crash for cash’ scams cost the insurance industry £392m per year - a cost that is ultimately reflected on your premium. The scale of the problem, which was revealed in an Insurance Fraud Bureau report last week, comes despite some major efforts to clamp down on it.

The IFB is an insurance industry-funded organisation that was set up in 2006 and has overseen 739 arrests for, among other things, crash for cash scams, particularly those where a crash is faked. In 2012, IFB-led operations resulted in 129 cash for crash fraudsters being arrested. But despite its efforts, the IFB report shows that cash for crash is thriving. So why is progress so slow?

IFB director Phil Bird said: “It’s difficult to get these guys; some are easier to spot and move on quickly, others are more sophisticated.”

Another positive development is the establishment of the Insurance Fraud Enforcement Department, a police unit dedicated to tackling insurance fraud. The unit, which was set up in January 2012, now has 34 detectives and financial investigators. By November 2012, it had already made 250 arrests, which had resulted in seven convictions, including some custodial sentences. Insurers and claims managers also investigate potential fraud, and some successes can be noted this year.

Recent research shows that almost half of all drivers would consider using a dash camera to reduce the risk of being wrongly blamed for collisions. 

An AA Motor Insurance survey of almost 10,000 people found that a significant number of respondents fear a bogus personal injury claim due to an accident of the type described. In addition, 46% of drivers questioned said a dash camera recording road journeys would offer greater peace of mind in the event of a personal injury claim.

“We were a little surprised that the number was that high, but there is no doubt that it is a driver’s nightmare to be innocently involved in a minor collision only to find a major claim being taken against you.” said the AA.

Installing dashboard cameras to avoid this problem is a small, one-off price to pay to safeguard yourself against these unscrupulous fraudsters, and it may well prove to be one of the best investments you ever make, along with bringing invaluable peace of mind.